G.R. No.

173154

December 9, 2013

SANGWOO PHILIPPINES, INC. and/or SANG IK JANG, JISSO JANG, WISSO JANG and
NORBERTO TADEO,Petitioners,
vs.
SANGWOO PHILIPPINES, INC. EMPLOYEE UNION - OLALIA, represented by PORFERIA
SALIBONGCOGON,1, Respondents.
x---------------x
G.R. No. 173229
SANGWOO PHILIPPINES, INC. EMPLOYEES UNION - OLALIA, represented by PORFERIA
SALIBONGCOGON, Petitioners,
vs.
SANGWOO PHILIPPINES, INC. and/or SANG IK JANG, JISSO JANG, WISSO JANG, and
NOREBERTO TADEO, Respondents.
DECISION
PERLAS-BERNABE, J.:
Facts:
On July 25, 2003, during the collective bargaining agreement (CBA) negotiations between
Sangwoo Philippines, Inc. Employees Union Olalia (SPEU) and Sangwoo Philippines, Inc.(SPI),
the latter filed with the Department of Labor and Employment (DOLE) a letter-notice of temporary
suspension of operations for one (1) month, beginning September 15, 2003, due to lack of orders
from its buyers. SPEU was furnished a copy of the said letter. Negotiations on the CBA, however,
continued and on September 10, 2003, the parties signed a handwritten Memorandum of
Agreement, which, among others, specified the employees wages and benefits for the next two
(2) years, and that in the event of a temporary shutdown, all machineries and raw materials would
not be taken out of the SPI premises.
On September 15, 2003,SPI temporarily ceased operations. Thereafter, it successively filed two
(2) letters with the DOLE, copy furnished SPEU, for the extension of the temporary shutdown until
March 15, 2004. Meanwhile, on October 28, 2003, SPEU filed a complaint for unfair labor
practice, illegal closure, illegal dismissal, damages and attorneys fees before the Regional
Arbitration Branch IV of the NLRC. Subsequently, or on February 12, 2004, SPI posted, in
conspicuous places within the company premises, notices of its permanent closure and cessation
of business operations, effective March 16, 2004, due to serious economic losses and financial
reverses. The DOLE was furnished a copy of said notice on February 13, 2004, together with a
separate letter notifying it of the companys permanent closure. SPEU was also furnished with a
copy of the notice of permanent closure. Forthwith, SPI offered separation benefits of one-half
() month pay for every year of service to each of its employees. 234 employees of SPI accepted
the offer, received the said sums and executed quitclaims. Those who refused the offer, i.e., the
minority employees, were nevertheless given until March 25, 2004 to accept their checks and
correspondingly, execute quitclaims. However, the minority employees did not claim the said
checks.
ISSUES:
a) whether or not the minority employees are entitled to separation pay; and

b) whether or not SPI complied with the notice requirement of Article 297 (formerly Article 283) of
the Labor Code.
.
A. Non-entitlement to Separation Benefits.
Article [297] of the Labor Code does not obligate an employer to pay separation benefits when
the closure is due to serious losses. To require an employer to be generous when it is no longer
in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer.
Ours is a system of laws, and the law in protecting the rights of the working man, authorizes
neither the oppression nor the self-destruction of the employer.
In this case, the LA, NLRC, and the CA all consistently found that SPI indeed suffered from
serious business losses which resulted in its permanent shutdown and accordingly, held the
companys closure to be valid. It is a rule that absent any showing that the findings of fact of the
labor tribunals and the appellate court are not supported by evidence on record or the judgment is
based on a misapprehension of facts, the Court shall not examine a new the evidence submitted
by the parties. Perforce, without any cogent reason to deviate from the findings on the validity of
SPIs closure, the Court thus holds that SPI is not obliged to give separation benefits to the
minority employees pursuant to Article 297 of the Labor Code as interpreted in the case
of Galaxie. As such, SPI should not be directed to give financial assistance amounting
to P15,000.00 to each of the minority employees based on the Formal Offer of Settlement. If at
all, such formal offer should be deemed only as a calculated move on SPIs part to further
minimize the expenses that it will be bound to incur should litigation drag on, and not as an
indication that it was still financially sustainable. However, since SPEU chose not to accept, said
offer did not ripen into an enforceable obligation on the part of SPI from which financial
assistance could have been realized by the minority employees.
B.Insufficient Notice of Closure.
Article 297 of the Labor Code provides that before any employee is terminated due to closure of
business, it must give a one (1) month prior written notice to the employee and to the DOLE. In
this relation, case law instructs that it is the personal right of the employee to be personally
informed of his proposed dismissal as well as the reasons therefor; and such requirement of
notice is not a mere technicality or formality which the employer may dispense with. Since the
purpose of previous notice is to, among others, give the employee some time to prepare for the
eventual loss of his job, the employer has the positive duty to inform each and every employee of
their impending termination of employment. To this end, jurisprudence states that an employers
act of posting notices to this effect in conspicuous areas in the workplace is not enough. Verily, for
something as significant as the involuntary loss of ones employment, nothing less than an
individually-addressed notice of dismissal supplied to each worker is proper. As enunciated in the
case of Galaxie:
Finally, with regard to the notice requirement, the Labor Arbiter found, and it was upheld by the
NLRC and the Court of Appeals, that the written notice of closure or cessation
of Galaxies business operations was posted on the company bulletin board one month prior to its
effectivity. The mere posting on the company bulletin board does not, however, meet the
requirement under Article [297] of "serving a written notice on the workers."The purpose of
the written notice is to inform the employees of the specific date of termination or closure of
business operations, and must be served upon them at least one month before the date of
effectivity to give them sufficient time to make the necessary arrangement. In order to meet the
foregoing purpose, service of the written notice must be made individually upon each and
every employee of the company